However, aside from the ease and convenience that digitized banking offers, it also makes it easier for customers to enjoy smart financial living. With this revolutionary model, people can achieve their short-term financial goals, as well as any long-term plans they may have.
Here are some ways through which digital banking can help you achieve your financial goals, from our guest author from a great writing service- Amanda Dudley.
Automated Savings 💸
What is the first step in financial planning? The answer is quite simple: saving. As an income earner, you can follow the popular 10% plan, which involves setting aside and saving 10% of your gross income. However, for a lot of people, saving money isn't exactly their strong suit. A recent study has shown that more than 27% of Europeans save no money at all on a monthly basis.
This is because most people have a hard time setting aside money for their retirement fund or any other financial goals they may be trying to achieve. However, there's an easy solution to this niggling problem.
If you've set aside a savings target for the year, the best way to achieve it is by automating them.
Automating your savings can help you prioritize your monthly or weekly reserves without having to think long and hard about it. Automation also allows you to save more over time. By having a deposit transferred to your savings account immediately after getting your paycheck, you'll be able to save a consistent amount over time.
Automated savings are also a ray of hope for people trying to get out of debt. If you owe a significant amount of money, you could easily automate your savings into an account for this purpose. This way, you won't miss instalments and incur more interest.
Digital Budgeting 🙌
Budgeting is one of the best ways to keep an eye on your expenses and build your finances over time. However, adjusting to a tight budget isn't exactly the easiest thing to do. In most cases, people end up exceeding their budget without even knowing.
Fortunately, digital banking makes it easier for customers to create a budget and stick to their stipulated monthly estimate of income without exceeding it. Most banking or financial apps offer users a comprehensive breakdown of their accounts, as well as their spending categories (for example, rent, transportation, etc.).
These apps also send out notifications to users each time they get close to their spending limit. This way, they'd never go over their monthly budget, except on occasions when it is absolutely necessary.
Higher Interest Rates for Deposits 🎉
Interest is an economic incentive that compensates savers for saving their money instead of outrightly spending it on wants or needs.
However, for a lot of consumers, many traditional banks and banking methods don't exactly offer customers sufficient incentive to store their cash in savings accounts. After all, why save and get peanuts as returns when you can simply spend it all at once? Moreover, nowadays many banks in Europe work with negative interest rates.
Fortunately, digital banking provides a solution to this tiny yet very significant problem. The advent of digitized banking has made it easier for banks to offer higher interest rates for deposits. This way, deposit account holders can earn a higher amount of fixed interest while keeping their money safe at the same time.
Final Thoughts 🌈
When it comes to achieving your financial goals, there are some hurdles that may stand in your way. You could be faced with unbudgeted expenses or even a pay cut. In some cases, a large number of people find it hard to reach their long-term financial goals even with a good paycheck.
If you've been asking questions like: ‘how to make my money work for me?’, the answer is simple - digital banking.
With numerous benefits such as higher interest rates and automated savings, this revolutionary banking model makes it easier for people around the world to experience financial growth and achieve their goals.